Aerotropolis update: Next Michigan Development Act passes

The legislation principally designed, drafted, and lobbied for by the Detroit Region Aerotropolis Development Corporation (ADC), its public and private sector partners, as well as business and labor leaders, was finally approved in the very early hours of Friday, December 3, 2010, by the Michigan Senate and House. Known as the Next Michigan Development Act (NMDA), this package of bills directly supports the ADC’s goals of attracting new business activity to Southeast Michigan. The bills now move on to the Governor for signing and enactment into law. Congratulations to the Detroit Region Aerotropolis partners and stakeholders. 

For the last six years, the ADC’s most visible champion, Wayne County CEO Robert A. Ficano, has carried the message of a long-range plan for job creation and new industry investment through the Aerotropolis initiative. Supported by a partnership between seven local governments, Wayne and Washtenaw Counties, and the Wayne County Airport Authority, the Aerotropolis stakeholders have institutionalized their common goal of transforming our airports into an engine for economic growth. Targeting 21st Century economies and industries not yet established in Michigan, the Detroit Region Aerotropolis will market the region’s transportation assets globally. Firms which specialize in alternative energy like A123 in Romulus, information and communications technology such as the new General Electric IT complex in Van Buren Township, and goods processors and call centers all need to have immediate access to passenger and cargo transportation systems. 

Unlike many airport cities operating throughout the world, the ADC is a much more thoughtfully planned project. Business Leaders for Michigan (formerly Detroit Renaissance) funded studies at a cost of nearly $1 million, providing a foundation to benchmark our economic potential against the world. These studies determined that more than 60,000 new jobs and over $10 billion in annual economic impact could be generated through development of the Aerotropolis region. 

Two years after the completion and publication of these studies, the Detroit Regional Chamber and Michigan State University released a study concluding that Metro Detroit could create up to 66,000 new jobs and $10 billion in new annual economic impact through the development of a coordinated supply chain management strategy.

Finally, in July 2010, the Brookings Institute released a report of metropolitan areas with the greatest potential to drive national export growth, ranking Metro Detroit ninth among the nation’s 100 largest metropolitan areas. Put together, these studies have made the case that the Detroit Region Aerotropolis initiative is worthy of support at the regional, state, and national level. 

The Next Michigan Development Act provides for up to five Next Michigan Development Corporations in the state. Each of these agencies can be established through interlocal agreements for the sole purpose of fostering new business investment around a region’s major transportation assets: aviation, rail, sea and roads. In order for an entity (other than the State’s five largest urban-center cities) to become designated as a Next Michigan Development Corporation, the applying entity must form an Act 7 (Urban Cooperation Act, P.A. 7, 1967) corporation with multiple local government partners. One of the local government partners must be a “core community,” and one of the partnering entities must be a county government. 

Included in the new bills is the authority to create new NMDA Renaissance Zones within each district. In practice, local ADC municipalities and counties can request a renaissance zone designation for a new business to the ADC Authority which, if approved, would be recommended to the Michigan Strategic Fund President for consideration and approval. NMDA incentives will allow the ADC to stimulate new investment by offering meaningful tax-free assistance to qualifying businesses. 

An ‘anti-poaching’ provision will protect local interests and ensure that companies are NOT eligible for incentives if they simply relocate within Michigan. Incentives will only be available to new companies coming into Michigan, or to existing Michigan companies that are materially expanding their operations within the state.

Truly a regional plan, the Aerotropolis district will maximally benefit all of Southeast Michigan workers by connecting with the established central business districts including downtown Detroit, Ann Arbor, Dearborn, and Oakland County. The Detroit Region Aerotropolis plan fits squarely with region-wide efforts aimed at integrating transportation, economic development and other infrastructure needs to make the Metro Detroit a gateway to the state, nation, and world. Complementary plans include the Regional Transit Coordinating Council’s (RTCC) regional transit plan for Southeast Michigan; the Southeast Michigan Council of Governments‘ (SEMCOG) recently completed Comprehensive Economic Development Strategy, and the Detroit Regional Chamber’s TrandlinkeD initiative to make Southeast Michigan a prime location for North American and global trade. 

We are grateful for the support of our partners in advancing this legislation, and we commend the bipartisan effort put forth by our Michigan legislators in finally passing this legislation.